Ireland as cross-border corporate-rescue venue
A William Fry (WF) briefing note explains how Ireland’s court-led rescue process is giving distressed global businesses a route to long-term viability.
The note points out that, as global enterprises deal with complex debt structures and high interest rates, Ireland is a premier venue for cross-border corporate rescues.
The examinership framework offers an agile, court-supervised rescue mechanism comparable to US Chapter 11 and British Restructuring Plans, the lawyers state.
Originally designed to preserve viable local businesses, examinership has evolved into a sophisticated tool for international debt work-outs.
Moratorium
Under Irish law, companies facing insolvency can secure an immediate, automatic 100-day moratorium against creditor enforcement worldwide.
During this protection period, existing management typically retains operational control under a debtor-in-possession model while an independent examiner formulates a restructuring scheme.
WF points out that a major driver behind the mechanism's international appeal is its seamless integration with European and global insolvency laws.
Schemes approved by the High Court benefit from automatic, binding recognition across all EU member states (excluding Denmark) under the EU Recast Insolvency Regulation.
Furthermore, the process enjoys established recognition in the United States under Chapter 15 of the US Bankruptcy Code and in Britain under section 426 of the Insolvency Act 1986.
Legal hurdles
This effectively neutralises the legal hurdles traditionally associated with English-law-governed debt.
Jurisdiction is equally flexible.
Foreign-incorporated entities can access Irish courts by genuinely shifting their Centre of Main Interests (COMI) to Ireland, using an Irish parent entity, or establishing a "sufficient connection" as a related company to an Irish enterprise already in the process.
The lawyers point to a string of multi-billion-dollar global restructurings:
- Norwegian Air (US $7.5 billion): The airline group used Irish examinership as its anchor restructuring tool to extinguish billions in aircraft debt and lease liabilities, successfully executing a cross-border capital raise,
- Mallinckrodt plc (US $6 billion & $1.9 billion): The pharmaceutical giant relied on parallel examinership schemes in Dublin to mirror its US Chapter 11 plans, re-balancing debt and resolving extensive opioid-related liabilities,
- Weatherford International (US $8.35 billion): Combined US Chapter 11, Irish examinership, and a Bermudan Scheme to execute a comprehensive debt-for-equity swap across its global energy operations.
Tactical advantages
Examinership offers distinct tactical advantages over competing international frameworks, the WF lawyers state.
Restructuring proposals require approval from just a simple majority of a single impaired creditor class.
Additionally, the law here facilitates non-consensual third-party releases connected to the debtor relationship, a remedy that is increasingly restricted in the US and Britain following recent landmark rulings.